126.63 Vegetable contractors; business practices.

(1) Vegetable grading and tare.

(a) A vegetable contractor shall grade vegetables according to the following standards if the vegetable grade may affect the amount received by the vegetable producer:

1. Standard grading procedures that the department establishes by rule.

2. Uniform grade standards that the department establishes by rule, unless the vegetable procurement contract clearly specifies alternative grade standards.

(b) If a vegetable contractor makes any deduction for tare, the vegetable contractor shall determine tare according to procedures that the department establishes by rule.

(c) The department shall establish grade standards for vegetables that conform to grade standards adopted by the federal department of agriculture under 7 USC 1621 to 1632.

(2) Prohibited deductions. No vegetable purchaser may deduct, from the amount payable under a vegetable procurement contract, an amount designated for the payment of any vegetable contractor license fee, surcharge, or fund assessment under this subchapter.

(3) Timely payment. A vegetable contractor shall pay a vegetable producer or producer agent according to the vegetable procurement contract. The vegetable contractor shall make the following payments by the following dates, unless the contract specifies a different payment date in writing:

(a) The 15th day of the month immediately following the month in which the vegetable contractor harvests or accepts delivery of processing vegetables, the full amount owed under the contract for those vegetables.

(b) The 15th day of the month immediately following the month in which the vegetable contractor rejects or fails to harvest processing vegetables tendered under the vegetable procurement contract, the full amount owed under the contract for those vegetables.

(4) Annual payment deadline.

(a) Except as provided in par. (b) or (c), a vegetable contractor shall pay all outstanding obligations to vegetable producers by January 31 of each license year.

(b) For processing vegetables tendered or delivered in January of any license year, a vegetable contractor shall pay the full amount owed under the vegetable procurement contract by February 15 or by the 30th day after the date of delivery, whichever date is later.

(c) A vegetable contractor may pay after January 31 for processing vegetables delivered on or before December 31, in accordance with a deferred payment contract, if all of the following apply:

1. The vegetable contractor complies with sub. (5).

2. The deferred payment contract specifies a date by which full payment must be paid.

3. The deferred payment contract clearly and conspicuously discloses that the vegetable producer or producer agent is disqualified from filing a default claim under s. 126.70 in the event that the vegetable contractor defaults on payment under the deferred payment contract. The department may by rule or order specify the form and content of the disclosure.

(5) Deferred payment contract.

(a) Before a vegetable contractor offers a deferred payment contract to any vegetable producer, the vegetable contractor shall put the deferred payment contract to a vote of vegetable producers, as provided in par. (b), obtain the approval of a majority of the voting vegetable producers, and comply with par. (c).

(b) To put a deferred payment contract to a vote of vegetable producers, the vegetable contractor shall give written notice to all vegetable producers in this state from whom the vegetable contractor procured the same type of processing vegetables during the preceding license year. In the notice, the vegetable contractor shall include a copy of the proposed contract, shall announce a meeting at which the vegetable producers will be asked to vote on the proposed contract, and shall include a mail ballot by which a vegetable producer may vote without attending the meeting. The vegetable contractor shall conduct the voting by secret ballot.

(c) To comply with this paragraph, a vegetable contractor shall file all of the following with the department:

1. A sworn statement certifying that the contract was approved in a vote of vegetable producers under this subsection.

2. Any additional security required under s. 126.61 (3).

(6) Cash on delivery. A vegetable contractor shall pay cash on delivery under all vegetable procurement contracts if any of the following applies:

(a) The vegetable contractor stated, in the vegetable contractor's last annual statement under s. 126.56 (9) (g), that the vegetable contractor would pay cash on delivery.

(b) The department disqualifies the vegetable contractor, under s. 126.59 (2) (c), or requires the vegetable contractor to pay cash on delivery under s. 126.61 (6) (e).

History: 2001 a. 16; 2009 a. 296.